Childcare market report - 'swift' recovery in 2021 led to 'exceptional' year for acquisitions

Within its 2022 report, Redwoods Dowling Kerr’s (RDK) chief executive Paul Miller states, ‘2021 was a year of two halves for the childcare sector. The start of the year was extremely tough for all operators who found themselves gripped at the forefront of a third wave of coronavirus infections.’

However, he says that as ‘the year progressed and the vaccination programme gathered speed, the recovery displayed by the sector was swift with many operators reporting higher than expected occupancy levels during the late spring period.' 

According to the report, 2021 was an ‘exceptional year’ for early years mergers and acquisitions, with total transaction values estimated to exceed £500m.

Going into 2022, RDK anticipates further consolidation among the top 30 UK childcare providers.

The brokerage says it believes this year represents a ‘golden window of opportunity’ and makes a number of market predictions for 2022, they include more European/Global entrants acquiring UK-based providers, private-equity backed groups continuing to grow and groups of fewer than five settings expanding their ‘geographical base’.

It also predicts that some UK based groups will expand into overseas markets in Europe and further afield.

Other market predictions for the childcare market include:

• Increased demand in and around city conurbations.
• Increased deal activity in the North of England, Scotland and Wales.
• More ‘double digit’ multiples for groups with regional and national scale.
• The funding market to remain ‘liquid’.

Read the full report here
https://redwoodsdk.com/childcare-education/.